Smallest diameter router tool to cut a panel out

A challenge with routers and Rotozip is that they require a guide to make accurate cuts. Can be time consuming and sometimes problematic (space). A great advantage of multi-tools and hole saws is that can cut right up against 90 degree bulkheads.

Note that with a hole saw the drill is only required to get it started. After that you can remove the center drill. Also, a hole saw can be stabilized with a scrap with a hole, and be used without a center drill at all, greatly reducing the chance of cutting something you don't want to. Also allows re-drilling of existing holes where there is no center.
 
+1 for the multi tool. I had an Aldi one which did for quite a few years, then bought a Bosch. Aldi probably do a battery one now, the supplied blades do not last but Bosch ones fitted I don't know whether they still do.

The Bosch one I bought uses the Starlock system and the blades can be changed or adjusted without tools which I would highly recommend. Mine also takes a sanding pad.
 
Lidl were selling them last night, battery powered.......around £28 if memory serves....... thou my memory could well be wrong there...!
 
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